Suppose a monopolist mistakenly believes that its marginal revenue is always equal to the market price. Assuming

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Suppose a monopolist mistakenly believes that its marginal revenue is always equal to the market price. Assuming constant marginal cost and no fixed cost, draw a diagram comparing the level of profit, consumer surplus, total surplus, and deadweight loss for this misguided monopolist compared to a smart monopolist.

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Microeconomics

ISBN: 9781319245283

6th Edition

Authors: Paul Krugman Robin Wells

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